"...Recently, there have been letters circulating that are leading many retirees to believe that a substantial portion of their military pay is non-taxable and as a result, they should file amended returns to obtain refunds.
These letters state that veterans with a disability rating of 20% or more are entitled to exclude a portion of their income. More specifically, someone with a 70% disability rating would only owe taxes on 30% of their pension income, someone with a 90% disability rating would only owe taxes on 10% of their pension, and so forth.
This is not true...."